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FORTUNE.COM // APR.1.19
MARK ZUCKERBERG WANTS TO TALK about how Facebook is changing.
It is early February, and the 34-year-old CEO sits on a couch
in his glass-walled conference room in Facebook’s newest com-
plex, a Frank Gehry–designed structure that features a 3.6-acre
rooftop garden and 40-foot redwoods. Zuckerberg summarizes
Facebook’s changes around “four big categories that we’ve
focused on,” all with the subtext of the immense criticism his
company has faced over more than two incredibly difficult years.
One category, he says, is “content governance, helping to balance
free expression and safety.” He continues, “Another is principles
around data privacy and, in a world where everyone is sharing a
lot of information, what are the right ways to go about protecting
that and giving people control.” Zuckerberg’s last two categories
are “digital health and well-being,” a nod to device proliferation
and screen-time overload, and “election integrity and preventing
interference.”
The talking points amount to Zuckerberg’s apology tour for
all the damage Facebook has wrought. On the way to building
an empire worth half-a-trillion dollars, he and his company have
connected friends old and new, sure, but they have also inadver-
tently found themselves in the middle of controversies from hate
speech to data breaches. Zuckerberg wants to show that he gets
it. Facebook, he says, “is moving from a reactive model of how
we’re handling this stuff to one where we are building systems to
get out ahead.”
A month later it becomes apparent that Zuckerberg has been
rehearsing his lines, the tech-mogul equivalent of a comedian trying
out material at open-mic night. In a much-heralded post on Face-
book in early March, Zuckerberg announced his company would
build new privacy-friendly messaging products, moving from a
“town square” approach to one more akin to a living room conversa-
tion. “People should have simple, intimate places where they have
clear control over who can communicate with them and confidence
that no one else can access what they share,” he
wrote. In other words, they should have a place
to communicate that is nothing like Facebook.
Change is a complicated topic for Facebook.
On the one hand, it certainly is doing a ton
to address its problems, like hiring tens of
thousands of workers to police its content. Yet
on the other hand, for the foreseeable future,
Facebook will remain exactly what it has been
over the past decade-plus of its meteoric rise:
a publishing platform that gathers data on its
2.3 billion users for the benefit of its mar-
keter customers, who helped Facebook record
$56 billion in revenues last year. Facebook may
be changing, but it aims to preserve what it’s
got until it figures out a way to replace the busi-
ness too much change would jeopardize.
Facebook’s fiddling with its business model
is also more pressing than many realize—and
not merely a response to the scrutiny the
company faces. Facebook’s core business is
slowing dramatically, even as a combination
of potentially hamstringing regulation and
rejuvenated competition looms. Its flagship
product, widely known as Facebook Blue, is
losing popularity, especially among younger
audiences. And user growth has slowed in the
rich countries where the company makes the
bulk of its money. Sure, Facebook’s 2018 rev-
enues grew at a torrid pace for a company its
size, gaining 37%. But that reflects a rapidly
declining growth rate, from 54% in 2016 and
47% in 2017. Wall Street projects continued
deceleration, to 23% this year and 21% in
2020, according to S&P Global.
Zuckerberg, without commenting directly
on the deceleration in Facebook’s revenue
growth, says he aims to chart a dual course,
one that protects Facebook’s current offer-
ings and another that finds new ways to make
money, through services like payments and
e-commerce. “We are trying to build services
that everyone can use,” he says, adding that
the best way to do this is to keep them “af-
fordable and ideally free” and thus funded
by advertising, Facebook’s existing business.
Asked how his new interest in privacy and
smaller-group communication will become a
business, he is tough to pin down, either be-
cause he doesn’t yet know or isn’t ready to say.
(His March manifesto is no more specific.)
Users, he says, “want to and rightfully should
be able to understand how their information